Chat transcript: We get deep into the bill in this one

New York, NY: Hi Ezra: I am an emergency physician in New York and have been following your reporting with great interest. Many of my patients are asking me about the future of "pre-existing conditions" and denial of coverage to children and adults due to various illnesses. Can you tell me when according to this legislation, insurance companies will no longer be able to deny coverage to children and adults with pre-existing conditions?!

Sincerely, Boris Markovich MD

Ezra Klein: Yep. For children, it's kicks in a couple of months from now. For adults, it's not until 2014. Why the lag? Because ending preexisting condition discrimination needs to be paired with other reforms, like the individual mandate, that will keep an insurance death spiral (where sick people rush into the system and healthy people rush out) from happening.

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Vienna, Va.: I don't get the GOP strategy on repealing. If they really are interested in health care, they'd work on the unfinished business -- serious efforts at delivery system reform. The pilot projects in the bill are basically worthless because they will take so long to get there. Are any Democrats seriously interested in this, or did they get what they want and now will go home?

Ezra Klein: I'm hoping everyone is interested in this. But the people who will be most interested will be the independent Medicare Commission, the panel of experts empowered to propose reforms to Medicare that go into effect even if Congress never votes on them. That's where the strongest pressure for delivery-side reforms will come from.

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Brooklyn, N.Y.: You've done a really heroic amount of TV appearances in the run-up to health care reform. Which news show is your favorite to be interviewed on and why?

Ezra Klein: I love them all equally.

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Sacramento, California: What is the best current "book" on the shadow banking system that you would suggest?

Ezra Klein: Gary Gorton wrote a book called "slapped by the invisible hand."

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New York, N.Y.: Ezra, you've argued that the reform law will bend the cost curve. But a large bulk of your evidence comes from the CBO, and my understanding is CBO does not dabble in predictions about health care costs generally. I am told the CMS is the authority on that, and they argue that the cost curve won't be bent. Is that wrong?

Ezra Klein: Yep. CMS if you ran CMS's numbers outwards the curve actually did bend downwards in the next 20 years or so. What you saw in their 10-year estimate was a change in the level of spending because we were covering the uninsured, not a change in the shape of the curve.

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Nate from D.C.: Now that the amount of health care dorkery needed by the world is much lower than over the past year, what obscenely complicated issue do you plan to dive into next?

P.S. more food posts, please.

Ezra Klein: There'll probably be more food! And I think financial regulation is my next major topic. But I hope to be able to be a bit broader in the next year or so.

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I'm confused: Stripped of politics, where can I find the bullet-points/facts about this legislation? What exactly will change in my life? I gave up following this bill, despite its prevalence in press/media, because it just became a morass of misinformation and an incomprehensible free- for-all. Is there some source where I can now look at the important ways this legislation differs from what has been (without opinion)?

Ezra Klein: The best summary sheets are at Speaker.gov. But they're not stripped of politics. The honest truth is there's not as good a home for summaries as I'd like there to be. That's why I've been trying to write my own set under the category "Explaining the health-care bill." You can find it on the left sidebar of the blog.

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Logan, UT: Hi Ezra -- I'm wondering if you can provide a snapshot of the funding mechanisms for this bill. Like, it earns $X billion from cutting Medicare Advantage, $Y billion from taxes on people making greater than 250K/year, $Z billion from the excise tax, etc.

Thanks, and thanks for all your excellent work in covering this debate...

-Greg

Ezra Klein: Not offhand, but I'll try to work something up for the blog.

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Bowie, Md.: This is typically misleading. Why did you pick the one poll showing people in favor for health care reform? While most Americans agree in some kind of reform, most polls show definitive opposition to the bill passed. This is one of the main reasons I've canceled my subscription to your newspaper is your inherit liberal bias.

Ezra Klein: Not sure what "this" refers to. I haven't mentioned any polls in this chat. If you're referring to the poll from yesterday, it's because it was the only poll taken entirely after the House's passage of the bill.

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Newport Beach, Calif.: Hi Ezra, Thanks for the fine, unbiased and incisive reporting you have been doing on health care reform. The bill cover 95 percent of Americans with insurance. Who are the 5 percent not getting covered?

Arlington, VA: I believe you fall more to the Jstreet crowd, so your probably enjoying the rift between Israel and Obama, but do you honestly believe that the left can continually aggravate one of its most loyal group (Jewish Democrats)? Its not often that Congress speaks with a Single voice, and Obama has bigger issues than whether Israel builds an apartment complex in an area that will stay within the Israeli boarders by almost all accounts (according to Jackson Diehl). It seems to me like Obama has picked the wrong fight here.

Ezra Klein: Well, I can say that I'm not aggravated by the president's decision to speak out forcefully regarding the settlements. Obama's Jewish support has been pretty high of late, and I don't think Netanyahu is coming off as a very sympathetic figure. American Jews are, after all, Americans, and they don't like to see Israel sticking a thumb in the president's eye (or the country's interests) either. Fareed Zakaria has a really good piece on this in the latest Newsweek, by the way.

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Manhattan: Ezra, the CBO notes that 8 million employers will drop their coverage, and those employees will then be left to join the exchanges. Will exchange-based coverage be any better or worse than employer-provided coverage? Also, if employers drop coverage in the next few years isn't there a problem in that exchanges won't be set up until 2014?

Ezra Klein: Well, there's no one employer coverage. It will probably be better than the coverage offered by those employers. What you're seeing in those number is not necessarily just businesses moving their people to the exchange, but people going to the exchange because their employer's insurance offerings costs more than 8% (I think that's the threshold, but it might be higher -- the number 12% is also in my head for some reason) of their income.

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Washington, DC: I've read some about the possibility that House Dems might be able to insert the Public Option or a Medicare expansion today then send it back to the Senate. Might the Republicans have done the Dems a favor by finding two needed corrections in the reconciliation bill and sending it back to the House? Is this a real possibility or just a liberal hope?

Ezra Klein: I don't think it's likely.

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D.C.: Often wonder why very little was heard from health care economists in the media in the health care debate. My question though is, can we cover the uninsured without a mandate?

Ezra Klein: You could get pretty close with auto-enrollment. But in the end, I think you need some kind of mandate to keep healthy folks in the pool. Single-payer, of course, is a government mandate.

Fort Mill, S.C.: Please explain the cuts to Medicare in HCR. In which programs will the cuts to be made? Where will the savings be spent? and, how will the cuts impact those on Medicare?

Ezra Klein: About a quarter of the cuts come from overpayments to private Medicare Advantage programs. Then there's the reduction in payments to hospitals for covering the uninsured, which makes sense as this largely gets rid of the uninsured. Then there's reduction in subsidies for high-income elderly in Medicare Part B and D. Then there are reductions in updates to hospital payments, though those aren't terribly sever given that the American Hospital Association signed off on the cuts.

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Boston, MA: Is DC really so momentum (or party morale) driven that Republican senators are going to start playing ball on financial regulation or even (outlandish though it might sound) sane climate legislation? Democrats can't pass any more legislation through the senate without crossover votes, so eschewing compromise doesn't seem to carry policy risk for the R's at this point. Is the culture of the city such that they'll actually forget this, or is the sudden surge of momentum for Dodd's bill just a blip?

Ezra Klein: People are making this argument, but I'm very skeptical of it.

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Richmond, VA: How much of the last minute rancor do you think could have been avoided if the House Democrats had never floated Deem and Pass?

To me, that seems to be when a lot of the more reasonable people (ex. David Brooks) went off the edge.

I can only imagine what the talk radio/cable TV would be sounding like now if they had actually done it that way.

Ezra Klein: I think most of the rancor was inevitable.

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Concerned about 2014: Given that so much won't be in place until 2014, I really worry about the period leading up to full implementation. What's to stop insurers from jacking up premiums, for instance? I thought the way to guard against that was via regulation of the exchanges, which won't be ready for a few years. Also, what if employers drop coverage in anticipation of higher payroll taxes, etc.? Again, people will only have "high-risk pools" to turn to for a few years.

Ezra Klein: On insurers and premiums, starting next year, 80% of what insurers spend needs to go to medical care (right now, it's like 70 percent in the individual and small-group markets). Any difference needs to be rebated to consumers. So if they jacked up premiums without also vastly increasing the amount of medical care their customers were purchasing, they'd just have to rebate the difference.

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Washington, DC: Ezra, something i've always been concerned about: premiums for most people are going to continue to go up, and go up by a lot, for the forseeable future, since the federal government can't exert any real price pressure on insurers or providers. Won't Obama and the Democrats get blamed for the still-deteriorating health care system, even though the system with reform is better than it would be otherwise? It's like with the stimulus bill. The economy got a lot worse, and the stimulus bill got some blame for that, despite all the evidence and theory that it helped. Isn't it possible the same thing will happen with health care reform?

Ezra Klein: I think this is a real concern.

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Gaithersburg, Md.: Did you see that the US Treasury market pushed the yield on short-term notes by about .10 percent and longer-term bonds .20 in just the last couple of days? Is that market expression it's opinion that a general inflation has gotten more likely?

Ezra Klein: In general, I wouldn't make much out of a few days of fluctuations in either direction. If it becomes a trend over months, then worry about it.

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Individual Mandate: Last night, Congressman Weiner told America that the fine levied against those who do not have health insurance will be like fines for littering: Sure, you're not supposed to litter, but no one is coming after you to collect the fine.

While Weiner wouldn't name the agency that would be responsible for enforcing the mandate (I assume that it is the IRS since the Individual Responsibility section refers to changes in IRS tax code), he did seem to say that no one will care whether or not you pay the fine.

Really? Uninsured people can remain uninsured and they won't be made to pay into the system? Not much of a mandate, is it?

Or is Weiner being less than accurate?

Ezra Klein: That's basically accurate. Non-payment doesn't result in criminal prosecution or liens. Though if this becomes a big problem, I'd expect that to change.

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Salt Lake City, Utah: You referred approvingly today to Tom Friedman's op-ed in which he basically claims that the political center is un-empowered. Do you really believe that Blue Dog Democrats lack power, as compared, say, to the highly progressive wing of the Democratic party? Is there anything in the way the healthcare reform debate has played out that leads you to this conclusion?

Ezra Klein: I'd put Friedman's point a bit differently: It's not that the ideological extremes are empowered so much as the partisan extreme. What you're seeing is not a Congress that very left or right wing, but a Congress where cooperation between the parties is virtually impossible.

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Bristow, Va.: Once upon a time, they said don't worry, just be happy. Are we there yet?

Ezra Klein: I don't think so. But give me three days off and I might feel differently.

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Santa Cruz CA: A common criticism of ACA right now is that the fine for not getting health insurance is small enough that many people (esp. young people) will simply pay the fine while healthy and then sign up for health insurance when they need, driving up everyone's costs and undermining the viability of the entire system. What prevents this from happening?

Ezra Klein: Santa Cruz! That's where I'd like my three days off to happen! As for the mandate, nothing really prevents that from happening except that people tend to want to have health-care insurance, so with subsidies and regulations making it possible to purchase, and the mandate pushing against simple inertia, hopefully things will work out. If not, we'll need to rethink the penalties.

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washingtonpost.com: Here's the Friedman piece: A Tea Party Without Nuts

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Coeur d' Alene, Idaho: The exchange sounds like an appealing idea. However, the exchanges are primarily set up at this point for individuals and small businesses. When will large companies or are large companies going to be allowed to participate in the exchanges?

Ezra Klein: They become eligible in 2017, though individual states can decide against letting them in.

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Dallas, TX: What is the current state of the anti-trust exemption for health insurance companies?

Ezra Klein: passed the House, awaiting Senate action.

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San Ramon, CA: Please define a "cadillac plan," and explain the proposal to tax such plans, how much they would be taxed, how much revenue such taxes would raise (annually) and the likelihood of this idea's staying in the final bill.

Ezra Klein: Come 2018, a "Cadillac plan" is an employer-sponsored plan that costs more than $27,500 for a family (the threshold for older workers and people in high-risk professions is $30,950). This does not include vision or dental benefits. The tax is 40% of everything above the threshold, so if your plan is $27,600, you're paying taxes on that final $100.

I think the idea is very likely to remain in the bill. The knowing cynicism on this point strikes me as off-base. I do think that you might see the rate of adjustment for the threshold changed from inflation to inflation plus one percentage point, or even two, so that it doesn't begin hitting Camry plans faster than the system can hold down costs.

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NY: Why are the Blue Dogs always referred to as fiscal conservatives even when they blocked several provisions in the health care bill such as competitive bidding for drug purchases and the public option that would have saved the tax payers some serious money and still in these articles they are referred to as fiscal conservatives. Sounds to me like they are corporate conservatives.

Ezra Klein: Whatever they are, it is true that they are not always and everywhere for policies that would save money.

I will say though in response to the mandate penalty that Mr Weiner should look to MA. They require you to provide a form in your taxes that shows you have healthcare (MA-1099HC). If you don't have healthcare i expect your income tax return is reduced. That's the most efficient way to collect the tax/penalty.

i'm not going to assume Mr Weiner is being intentionally inaccurate but he is a smart guy that should know better.

An earlier version of Gorton's book, in the form of a paper delivered at the KC Fed's annual Jackson Hole macro/financial economics get together, can be found with related papers here http://www.kansascityfed.org/home/subwebnav.cfm?level=3&theID=11441&SubWeb=10660

I for one like (nay, love) the suggestion that the Dems spoke of Demon Pass with little intention of pursuing it, knowing that it would drive legions, from wingnuts to David Brooks, around a bend. Heighten the contradictions and make them show some true colors (but do it in a nice way)

Yeah, as someone who's very supportive of reform, I'm not really sure where Weiner is coming from on this. Of course you can commit tax fraud to try to get around the penalty, and the amount at issue isn't huge so maybe enforcement will be lax, but that would be a bad thing, not something to knowingly wink at!

I don't know if it's too late for this, but one question I've been wondering about--how is someone's income determined for purposes of the subsidies? Specifically, suppose a person makes $80,000 in one year, his salary continues through halfway of the next year, but then he gets laid off, and he has to take a job with a dramatically lower salary. When would he become eligible for a subsidy?

Weiner's not wrong, precisely. The IRS will issue the fine in your taxes, but the bill says that no liens or criminal penalties can be result from failure to pay the fine. Personally, I think that's ridiculous. The fine is too low and if there is no downside to not paying it, why pay it?

And Ezra, you went deep into the law on this chat, plus the reconciliation bill. This bill became a law.

I'm going to go back to your first question. Here's my question I ask as an actuary: You said that the prohibition of insurance companies writing pre-existing clauses for children goes into effect immediately. But all that means is that insurers can't write a clause excluding a child's asthma, diabetes, heart problems, etc. But until 2014, the insurance company can still slap the child with pre-existing conditions with a substandard rating, and charge them infintely more -- the prohibition of substandard, standard, preferred, super-preferred, gender, occupation, etc. ratings doesn't begin until 2014. So from now until 2014, how is this anything more than marginally helpful to children who get their health insurance in the individual insurance market?

It's just really getting on my nerves how people think having the prohibition on pre-existing clauses amounts a great improvement of the status quo without guaranteed issue underwriting, guaranteed renewability, and the community rating. I mean -- Paul Ryan's health care proposal, which puts everyone in the individual insurance market has a prohibition on pre-existing clauses, guaranteed issue and renewability, but it lacks a community rating. Does anyone think the Ryan proposal will work for someone with pre-existing conditions if insurance companies can still vary premiums by health status, age, gender, occupation, etc. and by unlimited amounts?

visionbrkr : What you propose above (that is, for the executive branch of Federal government to take action against a citizen without intervention by the Court) might not be possible as a means of enforcing health care fines. To enforce the penalty, the executive ultimately has to win a civil action against the citizen in (Federal) Court. [Unless the fine is less than $12, perhaps.]

"This is one of the main reasons I've canceled my subscription to your newspaper is your inherit liberal bias."

Further proof that the "liberal media" is a myth, at least in the modern era. No objective person could read WaPo in the last few years, especially the op/ed section, and claim with a straight face that it tilts left.

the economist quotes a RAND study that says national health-care spending will be greater in the next ten years than otherwise with the new health care reform law. This is related to the chat question about CMS forecasts, and probably could be answered the same way by Ezra.